X5 Q2 Earnings Below Consensus But Margins Impress

Although Russia's largest retailer by annual sales X5 posted below consensus earnings for Q210 (financial year ending December), its earnings before interest, taxes, depreciation and amortisation (EBITDA) margin impressed, growing by 18.57% sequentially to 8.3%. X5 has invested heavily in margins, bringing down the EBITDA margin, during the downturn to uphold its competitiveness. The EBITDA margin growth has been achieved despite significantly lower food price inflation growth y-o-y in Russia in June

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